Question

Considering all your findings using the different methods of analysis ( 2017 through 2018 financial statements, annual reports, horizontal and vertical analysis ) on the financial statements for Target and Amazon, which company would you more likely invest in?

Your response to this question should be 3 paragraphs:

• One paragraph summarizing key points of analysis on Target
• One paragraph summarizing key points of analysis on Amazon
• One paragraph using these results to support and rationalize your investment decision
  
  Edit:

  Target Horizontal/Vertical Analysis Information

Answer 1

Horizontal analysis is a procedure in which the amounts in financial statements of 2017 will be compared with 2018 line by line in order to make related decision.

Vertical analysis is a method of analysis of financial statement where each line item is listed asa a percentage of another item ( one year i.e. 2017)

ANALYSIS ::

			TARGET
HORIZONTAL ANALYSIS
DESCRIPTION		2018	2017	Difference	% Change
TOTAL REVENUE		7,18,79,000.00	6,94,95,000.00	23,84,000.00	3.43
OPERATING INCOME		43,12,000.00	49,69,000.00	-6,57,000.00	-13.22
BASIC EPS		0.0053	0.0047	0.0006	12.77
EBIT		43,12,000.00	49,69,000.00	-6,57,000.00	-13.22
VERTICAL ANALYSIS
NET INCOME			27,37,000.00		3.94
TOTAL REVENUE			6,94,95,000.00		100
KEY POINTS		Operating Income and EBIT both are negative.
			AMAZON
HORIZONTAL ANALYSIS
DESCRIPTION		2018	2017	Difference	% Change
TOTAL REVENUE		23,28,87,000.00	17,78,66,000.00	5,50,21,000.00	30.93
OPERATING INCOME		1,24,21,000.00	41,06,000.00	83,15,000.00	202.51
BASIC EPS		20.68	6.32	14.3600	227.22
EBITDA		2,80,19,000.00	1,61,32,000.00	1,18,87,000.00	73.69
VERTICAL ANALYSIS
NET INCOME			30,33,000.00		1.71
TOTAL REVENUE			17,78,66,000.00		100
KEY POINTS		Sales revenue grew by 31%
		Operating Income grew by 202.5%
		EBITDA grew by 74%
INVESTMENT DECISION
AMAZON is a better investment option because sales revenue growth is more than TARGET
Operating income is negative for TARGET, whereas it grew by whopping 203% for AMAZON
EBIT is negative in case of TARGET, whereas in case of AMAZON it grew by 74%.
Net income as a percentage of total revenue of AMAZON is less than TARGET, mainly due to
depreciation and interest expenses. But looking at sales growth and operating income, net income
of AMAZON will improve in coming years when depreciation and interest expenses will fall due
lower depreciation and reduced interest owing to repayment of debt.